The administration on Tuesday announced that the value added tax (VAT) on diesel or high speed diesel will be reduced from 16.40 per cent to 11.40 per cent.

Image for representation (File Photo: AP)

Chandigarh: Fuel prices are set to drop in UT Chandigarh from Wednesday with the city administration deciding to bring down the VAT on petrol and diesel.

The administration on Tuesday announced that the value added tax (VAT) on diesel or high speed diesel will be reduced from 16.40 per cent to 11.40 per cent.

Similarly, the tax on petrol including branded premium petrol will be slashed from 24.74 per cent to 19.74 per cent, according to a release issued by the Chandigarh administration on Tuesday.

The diesel price now will be Rs 55.20, Rs 2.48 lower than the present rate of Rs 57.68 per litre. Similarly, the price of petrol will come down by Rs 2.74 per litre to Rs 65.66 from Rs 68.40 per litre, fuel pump owners said.

With the reduction in the tax on fuel, diesel in Chandigarh will be cheaper by Rs 2.23 per litre as compared to the price in neighbouring Mohali district, which falls under Punjab.

The gap between the petrol price in Chandigarh and Mohali will also go up to Rs 8.11 per litre. At present, petrol price in Mohali is Rs 73.77 per litre.

The decision to reduce tax on fuel came after Centre had asked the states to lower tax on fuel.